Employees who travel for business meetings or who work in multiple jurisdictions and have regional responsibilities can fly under the radar in some circumstances because they are not the traditional expatriates or assignees generally tracked by a human resources department, Jason Russell, managing director at Deloitte Tax LLP, said May 19.
“Trying to keep tabs on employee whereabouts can be a full time job,” said Russell, who spoke at the American Payroll Association's 2018 Congress in National Harbor, Md.
The tax consequences of mobile employees often depends on the work that an employee is doing, Russell said. The safest assumption is that whatever an employee is doing is of substance and value, he said.
Critical considerations for payroll professionals trying to ensure the compliance of an increasingly mobile workforce are the availability and accuracy of data, Russell said.
The accuracy of source data is important to determine which data is the “record of truth” when discrepancies among internal records are discovered, he said.
Responsibility for accurate data often falls on the business traveler because, in some circumstances, others may have limited knowledge of the employee’s actual travel and locations, Russell said.
As a company’s global mobility increases so, too, does the importance of managing company and employee needs and compliance with a jurisdiction’s regulatory requirements, Russell said.
Employees may be concerned with reconciling balance sheets and the compensation they receive, as well as with getting their questions answered, Russell said.
Employers may find it helpful to provide employees with a help desk to address questions about the potential tax implications of overseas activities and payroll documents in their tax preparation processes, Russell said.
Equipping employees with tools to encourage compliance is advantageous for employers, Russell said, noting that employees are becoming more savvy.
Equity compensation programs, such as stock options or incentive pay, present additional challenges to calculating taxes on employees, Russell said.
Many jurisdictions tax a portion of an award even if the employee is not in that jurisdiction at the time of the taxable event, potentially exposing employers and employees to trailing tax liabilities, Russell said.
“This trips up employers all the time,” Russell cautioned, noting that trailing liabilities are something that he has seen the Internal Revenue Service frequently audit.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)